NEWARK — New Jersey is suing Sears Roebuck and
Company for running auto repair centers that allegedly cheated
hundreds of consumers in connection with, among other things, the
sale of four-wheel alignment service, James E. McGreevey, Attorney
General David Samson and New Jersey Division of Consumer Affairs
Director Reni Erdos announced today.

The State’s five-count complaint, filed in
Hudson County Superior Court on October 10, 2002, alleges that Sears
Auto Repair centers throughout New Jersey have repeatedly violated
the State’s Consumer Fraud Act by engaging in fraudulent practices.
Sears Roebuck, based in Hoffman Estates, Ill., owns and operates the
nationwide chain of Sears Auto Repair facilities.

“New Jersey will not tolerate consumer fraud.
We will aggressively prosecute any companies that victimize
consumers with false and misleading practices,” said McGreevey.

Following an undercover investigation of 19
Sears Auto Repair centers in New Jersey and an expert review and
analysis of records subpoenaed from Sears Auto Repair centers in New
Jersey, the State has uncovered more than 350 instances involving
violations of the State’s Consumer Fraud Act and regulations
governing automotive repair. The number of violations is likely to
climb upon additional review of documents during the course of the
litigation.

For example, the complaint alleges, personnel
routinely charged for four-wheel alignments on vehicles for which
such service was impossible. The investigation revealed that many
of the cars in question were built to undergo only two-wheel
alignments -- which involves adjustments to only the front wheels --
or four-wheel alignments only with the addition of an after-market
kit. In many instances, such after-market kits were not present on
or added to the cars and, as a result, four-wheel alignments of the
cars in question would be impossible. Despite this, subpoenaed
documents reveal that consumers were repeatedly charged for such
service.

“This case has nationwide implications,”
Attorney General Samson said. “Business operators in New Jersey,
whether local or national, must understand that we will impose a
zero-tolerance on fraud. Practices that violate our laws and that
also violate basic standards of morality will be the bases of
aggressive action by our Department.

“This complaint is the result of an intensive
investigation which covered a review of documents from Sears Auto
Repair centers. It included undercover investigations at 19 Sears
centers, through which we uncovered hundreds of auto repair
violations. These investigations are continuing and will be
incorporated into this action. We brought this action at this time
to stop what we believe to be a far-reaching pattern and practice of
fraud at Sears Auto Repair centers. We will continue to pursue this
matter until we are certain all consumers harmed as part of this
fraud recover what is due to them,” Samson said.

“We are suing Sears because it has failed New
Jersey consumers by deceiving them and ignoring State law,” Erdos
said. “Sears and other corporations need to understand that when
they are doing business in this State, they are expected to play by
the rules or face the consequences.”

The State’s complaint also alleges that Sears:

Failed to obtain
consumers’ authorization before completing work on their vehicles.
On numerous occasions, the company represented to consumers that
personnel would conduct a “free” inspection of their vehicles’
alignment, but instead of doing the inspection and seeking the
consumers’ authorization, Sears’ personnel would complete the
repairs and bill consumers for the work performed.

Performed defective repairs, including failing to tighten lug nuts
and/or resurfacing brake rotors to the point where they were below
manufacturers specification.

Made
deceptive or misleading statements to entice consumers into
authorizing and paying for unnecessary repairs.

Failed to provide consumers with written estimates.

This is not the first time Sears has run afoul
of New Jersey’s auto repair laws. In 1992, Sears agreed to pay
$200,000 to establish an Automotive Repair Industry Reform Fund and
pay penalties and consumer restitution to settle allegations that
Sears Auto Repair centers engaged in fraudulent practices. In 1997,
Sears entered into a supplemental agreement with New Jersey to pay
penalties and costs for failing to advise auto repair customers of
their rights under State law.

The State’s suit seeks an order requiring the
company to pay restitution to affected consumers, and monetary
penalties under the Consumer Fraud Act.

Deputy Attorney General David Puteska of the
Division of Law is handling this matter for the State.